According to financial futurist Dave Nadig, a global trade slowdown related to US tariffs could create a more challenging environment for bond fund managers.
“All these capital holding requirements that led to the purchase of US finances are simultaneously rewind,” the former ETF.com CEO told CNBC’s ETF Edge on Wednesday. “So the traditional mathematics of things is bad for stocks, [and] Everyone is going to buy bond. This time, the shock we saw is something we’ve never seen before. ”
The benchmark 10-year financial obligation yield rose to 4.4% on Thursday. Yields have risen by more than 10% this week. Last Friday, I mentioned 3.86%.
Nadig believes that a slowdown in trade will continue to affect market activity.
“If there’s little trade, we need to reduce the funds for trade,” he said. “Historically, people have had to fund the dollar. That’s why it helps all countries around the world buy the US Treasury. It helps them manage international trade with the US. So if we reduce the amount of international trade, we should probably expect to aggregate bond holdings.”
